Cement Producers

[winston]

not vested

DJ MARKET TALK: China Cement Demand Far From Peaking - Daiwa

0831 [Dow Jones] Daiwa says China's cement demand is "still far from peaking," as it expects policy loosening to accelerate construction activity, resulting in an uptrend in cement demand and prices from 2H12-2013.

The house says infrastructure is the largest consumer of cement (Daiwa forecasts it to account for 45%-46% of demand over 2011-13); macroeconomic loosening, therefore, would improve the prospects for the cement market nationwide in 2H12.

Daiwa adds that sector valuations are undemanding, even in its bear-case analysis, and its top picks are China Resources Cement (1313.HK), Shanshui Cement (0691.HK), and West China Cement (2233.HK).

CR Cement rose 3.8% to HK$5.79 Tuesday.


Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: HSBC Prefers Anhui Conch Over CNBM

1415 [Dow Jones] HSBC says Anhui Conch Cement's (0914.HK) 1H12 profit warning suggests declining profitability for cement producers in 2Q, but the ongoing monetary easing should help to stimulate demand and stabilize pricing in 2H12.

The house says interest rate cuts can have a positive earnings impact for cement players as it estimates the industry's average net gearing is as high as 74% in 2012, and not surprisingly, China National Building Material (3323.HK) would see the most impact given its 290% of net gearing in 1Q12.

Still, despite CNBM benefiting the most from the interest rate cut, Conch remains HSBC's preferred industry play as it "provides the best risk-adjusted return given its cost advantage and financial strength."

Anhui Conch is off 3.5% at HK$21.80 while CNBM is up 0.7% at HK$8.95.


Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: Recovery Green Shoots For China Cement Sector-Daiwa

0856 [Dow Jones] Daiwa tips "green shoots of recovery" for China's cement sector.

It says growth for infrastructure investment has rebounded for three consecutive months and industry inventory levels are set to fall;

"We expect the government's policy loosening to accelerate construction activity, resulting in an uptrend for cement demand and prices starting from 2H12."

The house's top picks include China Resources Cement (1313.HK) for its quality management, high operational efficiency and above-peers earnings growth; Shanshui Cement (0691.HK) due to its attractive valuations and is selling to markets that have a favorable demand/supply outlook; and West China Cement (2233.HK) as its earnings are recovering.


Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: Daiwa Tips Better Prospects For China Cement Names

0818 [Dow Jones] Daiwa says 1H12 profit warnings look priced-in for China's cement sector, but "better earnings prospects do not yet look priced-in as the market remains generally cautious about the industry recovery."

The house reiterates its Positive sector rating, and tips the main catalysts would include the bottoming out of cement prices, in particular in the east, central and south; the ongoing rebound in infrastructure investment; a sharp decline in coal prices, which would mean lower unit production costs; and a decline in inventory levels.

Daiwa's top sector picks are China Resources Cement (1313.HK), Shanshui Cement (0691.HK) and West China Cement (2233.HK).


Source: Dow Jones Newswire

[winston]

China cement ex-factory price falls in May with climbing inventories
2012-06-22

China's cement production for May grew 4.3% from a year earlier, decelerating by 14.9 percentage points, the National Development and Reform Commission reported.

Plate glass output dropped 10.2%, against a growth of 21.7% in the year ago period.

Ex-factory cement price of key construction materials makers was RMB360.5 per ton, down RMB2.5, or 0.7%, from a month earlier, and down RMB26.5, or 6.8%, from a month earlier.

Their cement inventories jumped 14.1% from a year earlier to 18.58 million tons and plate glass inventories grew 21% to 34.41 million weight boxes.

During the first five months, cement output in China moved up 5% to 793,980,000 tons, decelerating by 14.3 percentage points. Plate glass output lost 1.7% to 298,280,000 weight boxes, versus a growth of 19.6% in the same period last year.

In the first four months, profit of construction material sector declined 7% from a year ago to RMB81.3 billion. In particular, profit from cement sector decreased 59.9% to RMB9.53 billion. Plate glass sector swung from a net profit of $2.35 billion to a net loss of RMB130 million.

Source: AStocks Financial News

[winston]

not vested

DJ MARKET TALK: Too Early To Turn Bullish On Cement Industry - MS

1347 [Dow Jones] China Resources Cement (1313.HK) rebounds 1.3% to HK$4.51 after tumbling 5.5% Thursday on its 1H12 profit warning, joining its peers Anhui Conch Cement (0914.HK) and West China Cement (2233.HK).

Morgan Stanley thinks "it is too early to turn bullish on the industry," as it believes "consensus is too optimistic" and further earnings downgrades are likely.

Among cement stocks, MS tips China National Building Material (3323.HK) and Sinoma (1893.HK) as having the biggest consensus downgrade risk and Shanshui Cement (0691.HK) the least.

Separately, UBS says cement prices failed to pick up in 2Q, the normally relatively high season for the industry.

"We believe that it takes more time for policy easing to take effect and drive demand up.

We do not expect the fundamentals to turn around until late 3Q12."

CNBM is down 0.5% at HK$8.23 on top of its 5.2% fall Thursday.


Source: Dow Jones Newswire

[winston]

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DJ MARKET TALK: MS Stays Bearish On China Cement Sector

1142 [Dow Jones] Morgan Stanley thinks consensus is too optimistic and that further downgrades are to come for China cement sector.

On the cement price outlook, the house expects pricing to remain weak in 2H12, due to excess cement capacity, weak property demand (due to high unsold property under development), and recovery of transportation infrastructure spending is likely to be moderate.

In addition, it sees about 40% downside risk to consensus earnings estimate if marking to market current cement price.

MS reiterates its Underweight rating on China National Building Material (3323.HK), for which valuation remains above mid-cycle. CNBM is up 2.2% at HK$8.28.


Source: Dow Jones Newswire

[winston]

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DJ MARKET TALK: Daiwa Tips "Good Value" In China Cement Sector

0910 [Dow Jones] Daiwa says cement demand does not look good in China currently, and many cement producers have issued profit warnings for 1H12.

That said, the macro data suggests that the country's overall economic conditions are holding up, and loosening measures by the central government are helping infrastructure and property investment to pick up gradually.

"We see positive developments for the China cement market for 2H12, especially when the rainy weather ends." Daiwa suggests investors look forward and accumulate holdings as it expects a gradual recovery for cement prices, profit margins and earnings for 2H12-2013;

Trading currently at about 6X P/E and around the replacement cost for 2012, "we see good value in the sector."

Its top picks are China Resources Cement (1313.HK), Shanshui Cement (0691.HK) and West China Cement (2233.HK).


Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: China Cement Demand To Recover By End-Aug - UBS

0316 GMT [Dow Jones] Chinese cement makers are higher on hopes, that Premier Wen Jiabao's remarks on ensuring growth may boost demand for the sector given its wide use in infrastructure and construction projects.

UBS Securities says it expects cement demand to recover by the end of August, partly helped by stimulus plans announced by local governments recently, including cities of Changsha and Nanjing.

Stock prices have been largely undervalued in the cement sector, and therefore will face less downward pressure going forward; hopes that more sector-wise supportive measures are likely to be introduced may also provide a strong floor to share prices of cement makers, the house says.

Its top pick is Anhui Conch Cement (600585.SH). Anhui Conch Cement is up 4.1% at CNY15.04; BBMG (601992.SH) rises 5.4% to CNY6.23; Huaxin Cement (600801.SH) gains 6.2% to CNY11.42.

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: China Cement Stocks Rally; Close To Turning Point-UBS

1409 [Dow Jones] China cement stocks are rallying more than the broad market, with leaders Anhui Conch Cement (0914.HK) and China National Building Material (3323.HK) both up a tad more than 4.0%, although Dongwu Cement (0695.HK) is down 2.3% at HK$1.27 after it issues a profit warnings less than 2 months after its listing.

UBS believes Chinese government would "take real action" to prevent the economy from further slowing down; it says infrastructure investment is a key driver for cement consumption and the policy support would help it to recover.

"We are expecting the cement consumption to pick in later August and drive the cement price rebound in September. We believe that cement sector is getting close to the turning point," UBS says and among H-shares, it prefers Conch and Shanshui Cement (0691.HK). Shanshui is up 1.8% at HK$4.49.

Source: Dow Jones Newswire